Question

Cortez Company sells chairs that are used at computer stations. Its beginning inventory of chairs was 170 units at $42 per unit. During the year, Cortez made two batch purchases of this chair. The first was a 295-unit purchase at $47 per unit; the second was a 365-unit purchase at $49 per unit. During the period, it sold 515 chairs

Determine the amount of product costs that would be allocated to cost of goods sold and ending inventory, assuming that Cortez uses

FIFO.

LIFO.

Weighted average.

Answer 1

			Units	Rate	Amt
		Beginning Inventory	170	42	7140
		First Batch-Purchase	295	47	13865
		Second Batch-Purchase	365	49	17885
	A	Total Available	830		38890
		Less: Units Sold	515
		Closing Inventory	315
		FIFO:
		Units Sold:	515
			Units	Rate	Amt
		Beginning Inventory	170	42	7140
		First Batch-Purchase	295	47	13865
		Second Batch-Purchase	50	49	2450
	B	Total Sold Units	515	COGS	23455
	A-B	Closing Inventory	315		15435
		LIFO
		Units Sold:	515
			Units	Rate	Amt
		Second Batch-Purchase	365	49	17885
		First Batch-Purchase	150	47	7050
	B	Total Sold Units	515	COGS	24935
	A-B	Closing Inventory	315		13955
			Units	Rate	Amt
		Beginning Inventory	170	42	7140
		First Batch-Purchase	295	47	13865
		Second Batch-Purchase	365	49	17885
		Total Available	830	46.86	38890
		Less: Units Sold	515	(38890/830)
		Closing Inventory	315
		Total Sold Units	515	COGS	24130.54	(46.86*515)
		Closing Inventory	315	46.86	14759.46	(46.86*315)